Intangiblia™
Plain talk about Intellectual Property. Podcast of Intangible Law™
Intangiblia™
The Secret Laws of Reselling: IP Rights in Secondary Markets
Ever wondered what happens when your right to resell clashes with someone else's trademark? The secondary market is booming—from luxury perfumes to used hard drives and even virtual farm animals—but these second lives come with surprising legal complications.
Secondary markets aren't just about thrift store finds anymore. They're complex ecosystems where intellectual property law determines what you can truly do with the things you've purchased. Through a global tour of fascinating court cases, we unpack the legal principles that govern reselling, refurbishing, and reimagining products across physical and digital realms.
In Norway, a phone repair shop learned the hard way that erasing Apple logos from replacement screens doesn't erase their legal obligations. Meanwhile, in India, courts embraced refurbished Seagate hard drives as sustainability wins. The digital world presents even thornier questions—can you resell an e-book like a paperback? (Spoiler: European courts say no.) And what about those $133,000 "MetaBirkin" NFTs that landed an artist in hot water with Hermès?
From Brazilian video game importers to Italian pharmaceutical repackagers, we explore how trademark exhaustion works differently across borders. You'll discover why Chanel fights so hard to control where its perfumes are sold, how Zynga protected its virtual cows from unauthorized trading, and what happens when Finnish axes travel from North America to the Czech Republic without permission.
Whether you're flipping consoles, fixing phones, or minting NFTs of luxury handbags, understanding these landmark cases could save you from accidental infringement. Secondary markets provide real benefits—reducing waste and extending product lifecycles—but navigating them legally requires knowing when ownership ends and intellectual property begins.
Subscribe to Intangiblia for more plain talk about complex IP issues that affect everyday transactions in our increasingly digital marketplace. Your secondhand purchases might come with more legal baggage than you realized!
while they were diving headfirst into the wild world of secondary markets. If you don't use it, why not sell it? Well, intellectual property might have something to say about that, from luxury perfumes to used hard drives and even virtual farm animals. Yes, seriously, these second lives often come with a little extra legal baggage. Buckle up. This episode is packed with lawsuits, loopholes and legal lingo decoded into laughs. This episode is packed with lawsuits, loopholes and legal lingo decoded into laughs. Let's boot up.
Speaker 2:break it down and make IP law resale worthy. You are listening to Intangiblia, the podcast of intangible law. Playing talk about intellectual property.
Speaker 3:Please welcome your host, Leticia Caminero. Welcome to Intangiblia, the podcast where creativity finds a new market to thrive. I'm Leticia Caminero, and today we're unpacking a topic that touches anyone who's ever resold repaired. That's right. We're talking about secondary markets and intellectual property, because that thing you bought, it might still be someone else's intangible asset, and in the eyes of the law, those come with rules and fees, and sometimes a full blown lawsuit.
Speaker 1:Darling, hola, digital darlings, I'm Artemis Suh, coded, clever and never caught selling knockoffs. This episode was created using AI tools, including me. No pre-loved goods were harmed in the making of this podcast, unless you count bruised egos.
Speaker 3:In court, we'll break down how trademark and copyright laws come into play when things get resold, repackaged or remixed.
Speaker 1:Whether you're flipping consoles, fixing iPhones or minting NFTs of luxury handbags, this one's for you. And let's be clear secondary markets aren't the villain here. They have real benefits, from reducing waste to giving products a longer life. Intellectual property isn't here to stop that. Just to make sure we do it smartly, without stepping on anyone's rights stepping on anyone's rights.
Speaker 3:So let's start with the basics. What is a secondary market? In short, it's the place where things get a second chance, not in a reality show, redemption, art kind of way, but in a resell, refurbished, reimagined kind of way. We're talking pre-loved handbags, secondhand consoles, refurbished phones and even resale of digital goods. If it's already been sold once and someone's selling it again, it's in a secondary market.
Speaker 1:Exactly. It's like retail's cool rebellious cousin who says I don't need new, I just need Wi-Fi and an auction site. But here's the kicker Just because you bought something doesn't mean you own all the rights to it, especially not the intellectual property.
Speaker 3:That's where it gets juicy. Enter the legal buzzwords trademark, exhaustion and copyright. First, sale doctrine. Now don't tune out. We'll translate Leticia, may I Please?
Speaker 1:Okay, trademark exhaustion means that once the rightful owner sells a product, they usually can't control what happens to that specific unit. So you can resell that bottle of Chanel perfume, but you can't start your own Cocoa marketplace and slap their name everywhere.
Speaker 3:Exactly. The right to resell exists, but the right to rebrand or remix, that's another story. And copyright first, sale doctrine that's the rule that says if you buy a physical copy of a book, you can lend it, sell it or display it, but you can just upload it and resell the file like a digital lemonade stand.
Speaker 1:Because when you copy digital goods, you're not just reselling, you're multiplying, and copyright law is allergic to cloning. The spicy topic of parallel imports, that's when someone buys a genuine product in one country and resells it in another without the brand's permission. And the brand oh, they hate that because it can mess with pricing, image and their carefully curated global rollout vibes.
Speaker 3:Sometimes the courts side with the reseller, sometimes with the brand, sometimes nobody wins and everyone gets lawyered.
Speaker 1:But fear not, we're about to break down nine real life legal dramas that bring all this to life Perfumes, hard drives, video games, digital handbags. This courtroom's got range.
Speaker 3:All right, let's crack open our first case and, trust me, this one is juicy. Picture this A Norwegian phone repair shop quietly imports some iPhone screens Not Apple originals, but they come with a little twist, or should I say a little logo.
Speaker 1:Except they try to be sneaky about it the Apple logo wiped off with a marker like sheesh. No one will notice. Darling, if you need to bring a Sharpie to a trademark party, you're already in trouble.
Speaker 3:Apple saw it differently. They said, excuse me, we invented that pit and fruit and even if you smudge the mark, the brand still walks into the room with those screens. So they sued and took the case all the way to the top.
Speaker 1:Norway's Supreme Court was not playing. They said look, even if the logo is erased, the screen still screams Apple. When it's installed on an iPhone, it's like wearing red soles. We all know you're trying to give us Louboutin. Trying to give us Louboutin.
Speaker 3:The court leaned on a famous EU case, mitsubishi v Duma, where removing the logo from industrial machinery didn't stop it from being trademarked. Use the logic if the mark still matters to consumers, it's still well a mark.
Speaker 1:So what's the lesson here? You can't scrub your way out of trademark infringement If the replacement part shouts Apple, even when it's whispering courts might call foul.
Speaker 3:And in terms of IP doctrine, this one really hinges on what's called the exhaustion principle principle, or, as we say in regular speak, can a trademark holder control how their stuff is reused or resold once it's out in the wild Norway said not when it messes with the brand aura.
Speaker 1:No exhaustion here. Apple didn't sell the screens in the EEA means the European Economic Area, that's the European Union plus a few extra countries like Norway, iceland and Liechtenstein, and they bore the Apple identity even with a magic marker cover-up.
Speaker 3:So, yes, your right to repair exists, but your right to import logo-wide parts and install them like it's business as usual, not so much Bottom line.
Speaker 1:If you're going to fix phones, don't fake the fruit.
Speaker 3:Now let's switch gears from shiny phones to dusty hard drives. In India, seagate yes, the big data storage company went head to head with a parallel importer called Daiichi International. What for Refurbished hard drives Refurbished.
Speaker 1:Hard drives Refurbished, but fabulous. Daichi was importing used Seagate hard drives, giving them a little TLC, tender, loving care. So the hard drives were cleaned up, repaired or gently restored before resale in India. Seagate was not amused.
Speaker 3:They sued, arguing that Daichi was infringing their trademark rights by importing and selling products without their permission, even though the goods were genuine.
Speaker 1:But the Delhi High Court came through with a plot twist. They said hold up, these are genuine Seagate drives. There's no law in India that says refurbished products with valid trademarks can't be imported.
Speaker 3:The court leaned on something called the exhaustion of rights principle, which basically says that once a product is sold legally, you can't use IP law to control every resale afterward, and in India they're a little more open about international exhaustion.
Speaker 1:Meaning if SEGE sold the hard drive anywhere in the world. That trademark is kind of exhausted, like me, after a long software update.
Speaker 3:And let's not forget the president here. They leaned on an earlier case, Western Digital Derby Dugar, which had a very similar fact pattern. That case also protected refurbishers under the same logic.
Speaker 1:So the takeaway In India, reselling and refurbishing genuine branded goods isn't trademark infringement, as long as you're transparent and not pretending to be the original maker.
Speaker 3:Which is huge for sustainability, access to tech and the growing refurb economy.
Speaker 1:And it sends a clear message to big brands Once your product hits the market, you don't get infinite control. Not here, not this time.
Speaker 3:We've done hardware, now let's go virtual Picture the early 2010s, back when Farmville was still growing digital strawberries on half the world's Facebook feeds.
Speaker 1:Ah yes, simpler times when your biggest problem was whether to harvest eggplants or build your pixelated chicken coop.
Speaker 3:Enter PlayersAuctionscom. This third-party platform lets players sell in-game currency and virtual items from Zynga games, think Farmville cash or Mafia Wars. Goods, but Zynga didn't plant that seed.
Speaker 1:They sued hard Trademark infringement, copyright infringement, cyber squatting you name it. Zynga basically said you're profiting from our worlds, our brands and our fake farm animals. Stop.
Speaker 3:The court agreed granting injunctive relief, which basically means Zynga got the judge to say shut it down. Now it's like a legal pause button stopping the resale while the rest of the lawsuit plays out or in gamer speak.
Speaker 1:it's like getting banned mid-quest. No loot for you, no XP and definitely no unauthorized cows changing hands.
Speaker 3:That order made sure players' auctions couldn't keep helping people sell Zynga's virtual stuff, Even if it was just a few digital coins. The court treated it as a serious IP issue. Even if it was player-owned content, Zynga still held the IP reins.
Speaker 1:This case was one of the first big red flags for third-party resale of digital goods was player-owned content. Zynga still held the IP reins. This case was one of the first big red flags for third-party resale of digital goods, especially in games where terms of service say everything you own in the game is actually licensed to you, not owned.
Speaker 3:And here's the kicker the court treated virtual goods those coins, cows and cash as IP protected content, not just 1S and 0S. So platforms facilitating resale were on shaky ground if they didn't have publishers, which to be clear, they usually don't.
Speaker 1:It's like opening a lemonade stand with Beyonce's name on the cup. Cute, maybe Legal.
Speaker 3:Nope. But here's the twist Digital Resella has evolved since 2011. Some courts today might explore user rights a little more, especially with NFTs, digital skins and gaming economies worth billions.
Speaker 1:Still, the Zynga case remains a foundational moment. It set the tone for what platforms can't do, at least not without a legal spank and a cease and desist.
Speaker 3:And I also showed how digital ownership is anything but simple. You can't always sell what you thought was yours, even if it came with sparkly cows. Okay. So picture this A Dutch website called Tomkabinet starts selling secondhand ebooks. Yes, you heard that.
Speaker 1:right Use digital books, which already sounds like a contradiction. What's next? A pre-owned email?
Speaker 3:right. But Tomkabinet had a clever little system. Users could sell their legally purchased e-books to others through the site. It felt like the digital version of a neighborhood book swap, except there was a plot twist.
Speaker 1:Publishers were not fans. They said you can't resell e-books like paperbacks. This is copyright protected content, not a hand-me-down sweater.
Speaker 3:So the case went all the way to the CJEU, that's, Europe's top court. The question was does the first sale doctrine apply to digital content? That rule usually means that once a copyrighted good is sold, the copyright holder can control its resale.
Speaker 1:But the court said nope, not here. Why? Because reselling a downloaded file involves making a new copy, not just handing over the old one, and copying that's still protected by copyright law still protected by copyright law.
Speaker 3:In legal speak, they said it was a communication to the public, which is something authors and publishers have the exclusive right to control.
Speaker 1:Translation when you upload that e-book to resell it, you're not just selling a thing, you're performing an act that copyright law treats like a public broadcast With no license. That's a big no-no.
Speaker 3:So, even though Tom Kamaminit insisted it only allowed resale of lawfully acquired copies, the court said the model still infringed rights. The resale of e-books, unlike physical books, is not covered by exhaustion.
Speaker 1:And poof that secondhand digital bookstore closed up shop faster than you can say.
Speaker 3:Control plus Z. This case is a landmark in the digital resale space. It draws a hard line. Digital goods don't behave like physical ones. Legally speaking, Ownership gets complicated when what you own is a license file, not a book you can dog ear.
Speaker 1:It's a license file, not a book you can dog ear.
Speaker 2:So next time someone says they want to open a secondhand Kindle store, maybe don't.
Speaker 3:Intangiblia, the podcast of intangible law, plain talk about intellectual property. If you thought fashion lawsuits couldn't get high tech, think again. This one involves Hermes, the ultra luxury brand behind the iconic Birkin bag, and a digital artist named Mason Rothschild.
Speaker 1:Spoiler. He wasn't making handbags, he was minting Meta Birkins a collection of 100 fuzzy cartoonish NFTs inspired by Birkin bags with no Hermes permission in sight.
Speaker 3:They were colorful, furry and totally unlicensed. Rothschild claimed it was art, A commentary on consumer culture.
Speaker 1:Hermes saw it differently Blatant trademark infringement blatant trademark infringement and the jury agreed In 2023,. A New York federal jury found Rothschild liable for trademark infringement, trademark dilution and cyber squatting. Basically, you can't piggyback off someone else's luxury brand, even in the metaverse.
Speaker 3:They awarded Hermes around $133,000 in damages and the court issued a permanent injunction of forever no to stop further sales of MetaBurkens.
Speaker 1:Let's pause on that. A permanent injunction is the court's way of saying you're done for good. It's not just a pause, it's a shutdown order with no reboot.
Speaker 3:The case turned heads because it said a precedent even virtual goods can infringe trademarks, especially when they imitate real world luxury products in ways that confuse consumers. In the First Amendment, defense it didn't land.
Speaker 1:The jury decided that calling something art doesn't give you a free pass to hijack someone else's brand equity.
Speaker 3:Especially when your furry digital bags sell for thousands and ride on the reputation of a world famous fashion house.
Speaker 1:So if you're thinking of launching Gucci ghosts or Prada portals on the blockchain, better call your lawyer first or, you know, just don't the blockchain.
Speaker 3:Better call your lawyer first, or, you know, just don't. Metavirkin may have been made of pixels, but the legal consequences were very, very real.
Speaker 1:And if you're wondering what might happen to the Walkmark Birkin, you know that suspiciously familiar handbag with a lowercase b, sold next to the faux croc sandals and smelling faintly of cinnamon gum.
Speaker 3:The one that cleans, is inspired by the Birkin but costs $39.99 and comes with a matching keychain.
Speaker 1:Exactly Wait and see. Oh, that's a story for another time. My friend, let's just say trademark lawyers are watching those shopping carts too. Ah, chanel.
Speaker 3:The brand of elegance timeless scent and apparently persistent legal battles over where that scent gets sold Enter Notino, a big name online beauty retailer in the EU.
Speaker 1:Think of it like the Amazon of fancy face cream. They were selling Chanel perfumes and cosmetics that, while genuine, hadn't been distributed through Chanel's official European channels.
Speaker 3:That my friend is what we call parallel imports Genuine goods brought into a country without the brand owner's permission.
Speaker 1:Think real perfume wrong pipeline If Chanel wasn't having it. They argued that Notino sales bypassed their authorized supply chain and diluted the brand's high-end aura. It's hard to scream luxury when your perfume's hanging out in the digital clearance aisle.
Speaker 3:When Chanel filed suit, and this wasn't a short spot. It dragged on for six years, by 2023,. The high court finally took it up.
Speaker 1:Chanel's legal argument that allowing cross-border resale of their goods, especially outside their carefully curated network, hurt their brand integrity, mess with warranties and disrupted pricing strategies and disrupted pricing strategies.
Speaker 3:Dino's defense hey, we're selling real products. We're just giving consumers access and maybe a discount while we're at it.
Speaker 1:This is where trademark exhaustion comes in In the EU. Once a trademark product is sold with consent anywhere in the European economic area, the rights are considered exhausted. But Chanel argued these goods came from outside that EEA.
Speaker 3:The key legal issue whether Chanel had actually consented to these specific goods entering the EU market. If not, they could still block resale based on trademark rights.
Speaker 1:As of the latest update, the Prague High Court heard the appeal in November 2023 and a final ruling is pending, but the case highlights how luxury brands are pushing back on online resellers even when the goods are real.
Speaker 3:It's also about control, not just of the product, but of the image, the experience and the pricing, because a Chanel that smells like savings might not smell like Chanel at all.
Speaker 1:Meanwhile, shoppers just want to know if it's the real deal and if it'll make them feel like Catherine Deneuve. But legally, it's never just about the bottle, it's about the path it took to get there.
Speaker 3:Picture this You're in your backyard singing a sleek orange handle axe with Finnish precision, the brand Fiskars. But, surprise, that axe didn't arrive by the EU's usual retail path.
Speaker 1:Came from North America, still shiny, still sharp, but shipped in from outside the EU. And that, my friend, is where Fiskars lost its edge, at least in terms of legal control.
Speaker 3:The Czech retailer Manfield was importing Fiskars branded products and reselling them domestically. Fiskars wasn't thrilled. They hadn't launched or sold those specific goods in the EU recently and they wanted to stop the resale.
Speaker 1:What did Fisker do? They grabbed their legal shears and sued, arguing trademark infringement because the goods were entering the EU without their green light.
Speaker 3:But Mountfield pulled out a familiar defense international exhaustion. They claimed that once Fisker sold the products abroad, even in North America, the trademark rights were spent. No take backsies.
Speaker 1:The Czech Supreme Court agreed partially. They upheld the idea of international exhaustion, meaning in principle trademark rights can be exhausted outside the EU if conditions are met.
Speaker 3:But here's the juicy bit. The court said this wasn't just about where the product came from. It also examined whether Piscars was using its trademark rights in bad faith, like, say, refusing to sell in the EU at all, just to block others.
Speaker 1:That's the abuse of rights angle. If you don't make your product available in a market but then sue, everyone who tries to bring it in courts start raising eyebrows.
Speaker 3:The final judgment emphasized both exhaustion and abuse, though the full outcome details weren't crystal clear, but the message Trademark owners can sit on their hands, skip the market and expect to block every parallel import, Especially when the product's real, the logo's real and your customers just want to hack at their hedges.
Speaker 1:In peace and still.
Speaker 3:Piscar showed how, even in markets like gardening tools, IP enforcement isn't just about protection.
Speaker 1:It's about territorial timing and maybe, just maybe, it's about letting the axes fall where they may. Ah.
Speaker 3:Brazil, land of carnival coffee and apparently some very spicy legal takes on imported video games.
Speaker 1:Picture this a shiny new console is launched abroad, everyone's hyped, but in Brazil, crickets, the authorized distributor, hadn't dropped it yet. So what do retailers do?
Speaker 3:They go rogue. Some local stores started selling parallel imported consoles real products, just not from the official Brazilian supplier.
Speaker 1:And you better believe the authorized distributor hit the panic button. They ran straight to the 43rd Civil Court of Sao Paulo screaming unfair competition.
Speaker 3:Now let's pause and explain that Unfair competition in this context doesn't mean lying or selling fakes. It means undermining the official seller by selling the same stuff without playing by the same regulatory and import rules.
Speaker 1:And here's the thing the distributor hadn't even launched the console yet in Brazil, so these stores were kind of scooping the rollout, cutting the official supply chain off at the knees.
Speaker 3:The court not amused. They granted injunctive relief, basically a legal stop right there. The police could seize those consoles like physically game over.
Speaker 1:And remember these were legit products, no counterfeits. Over. And remember these were legit products, no counterfeits. Just a shortcut through the global retail jungle. But the court sided with the idea that this undercut local pricing, taxes and brand control, even if the console was real.
Speaker 3:The route it did make it legally problematic, especially when local rules and timing are in play.
Speaker 1:Listen, if you're importing tech into Brazil behind the distributor's back, you might find yourself hitting reset in court.
Speaker 3:All right, let's talk bills, and no, not the kind that help you forget your IP midterms. We're talking pharmaceutical parallel imports, a very regulated, very serious kind of IP telenovela.
Speaker 1:Our setting, italy, the Lazio Regional Administrative Court, tar Lazio, if you want to sound cool in legal circles. The drama generic drugs being sold across EU borders, but with different looks.
Speaker 3:The issue here wasn't just the parallel import. That's actually legal in the EU under the principle of exhaustion. Once a product is sold within the European economic area, it can be resold elsewhere in the EEA.
Speaker 1:But and you know there's always a but. When the packaging is different, things get complicated. A parallel importer wanted to relabel the medicine, basically give it a glow up, so it matched what Italian consumers expected.
Speaker 3:So this wasn't counterfeit. It was more like let's slap on a prettier label, maybe a different language, maybe a nicer font.
Speaker 1:The trademark owner said nope, that's not our label, that's not our style. You're messing with our brand.
Speaker 3:And here's where the court stepped in with a sharp eyebrow. Raise Tarlazio ruled that relabeling can be allowed, but only if the importer proves that it's strictly necessary to market the product in the destination country.
Speaker 1:Strictly necessary equals, not just a design choice. You need to show there are objective differences in labeling, standards or requirements and that without the relabeling, patients might not trust the meds or, worse, not take them properly.
Speaker 3:So if the new packaging avoids public health confusion, go for it. But if it's just to make the box cuter, sorry no, in other words, this isn't a packaging makeover show.
Speaker 1:It's about functional legal necessity.
Speaker 3:You can't remix a drug's branding just because Comic Sans gives you a rash this case added nuance to how IP and public health intersect, especially in the tightly regulated world of pharma. The court didn't block relabeling altogether. It just made sure there were rules and receipts.
Speaker 1:Which means for all you parallel importers out there check the local laws, check the trademark guidelines and maybe check your design choices too.
Speaker 3:All right. We've traveled from luxury handbags to hard drives, garden access to digital cows, and we've learned a lot along the resale road.
Speaker 1:So let's break it down.
Speaker 3:Here are our three resale ready takeaways no receipt required, Trademark exhaustion or the idea that rights run out after the first sale sounds simple, but the reality Full of asterisks. Whether it's international, regional or something in between, exhaustion rules vary wildly. Courts look at where the product was sold, by whom and under what conditions.
Speaker 1:You might think you can just say hey, I bought it fair and square, but courts will ask where, when? And did you redesign the box in comic sense?
Speaker 3:If the product's real and unaltered, importing it without the brand owner's blessing might be legal, but if you're selling before the official launch by passing safety labels or slapping a fresh logo on it, Boom.
Speaker 1:Welcome to Litigation City. Population U. Parallel imports aren't inherently evil, but they're definitely not plug and play. Ask Brazil, ask Chanel, ask anyone who's tried it without a lawyer.
Speaker 3:Whether it's a virtual NFT Birkin or a budget axe from across the pond, trademark rights don't disappear just because something crosses a border.
Speaker 1:IP travels, it has carry-on and checked baggage, and sometimes that baggage comes with court filings.
Speaker 3:So, whether you're reselling, repairing, rebranding or relabeling, respect the mark, understand the market and maybe don't tempt fate with a counterfeit tote.
Speaker 1:And that's a wrap on resale rights, legal fights and second chances gone sideways.
Speaker 3:Your favorite IB case doesn't make it in. Don't worry, this isn't our last lap around the secondary market.
Speaker 1:We'll be back next Tuesday in English and Spanish. And yes, this episode was created using AI tools, including me, your fabulously informed co-host.
Speaker 2:Thanks for listening to Intangiblia where creativity meets defined print, even on the Clarence Rack. Do you want to learn more about intellectual property? Subscribe now on your favorite podcast player. Follow us on Instagram, facebook, linkedin and Twitter. Visit our website wwwintangibliacom. Copyright Leticia Caminero 2020. All rights reserved. This podcast is provided for information purposes only.